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Consumers’ willingness to pay for alternative fuel vehicles: A comparative discrete choice analysis between the US and Japan

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  • Tanaka, Makoto
  • Ida, Takanori
  • Murakami, Kayo
  • Friedman, Lee

Abstract

This paper conducts a comparative discrete choice analysis to estimate consumers’ willingness to pay (WTP) for electric vehicles (EVs) and plug-in hybrid electric vehicles (PHEVs) on the basis of the same stated preference survey carried out in the US and Japan in 2012. We also carry out a comparative analysis across four US states. We find that on average US consumers are more sensitive to fuel cost reductions and alternative fuel station availability than are Japanese consumers. With regard to the comparative analysis across the four US states, consumers’ WTP for a fuel cost reduction in California is considerably greater than in the other three states. We use the estimates obtained in the discrete choice analysis to examine the EV/PHEV market shares under several scenarios. In a base case scenario with relatively realistic attribute levels, conventional gasoline vehicles still dominate both in the US and Japan. However, in an innovation scenario with a significant purchase price reduction, we observe a high penetration of alternative fuel vehicles both in the US and Japan. We illustrate the potential use of a discrete choice analysis for forward-looking policy analysis, with the future opportunity to compare its predictions against actual revealed choices. In this case, increased purchase price subsidies are likely to have a significant impact on the market shares of alternative fuel vehicles.

Suggested Citation

  • Tanaka, Makoto & Ida, Takanori & Murakami, Kayo & Friedman, Lee, 2014. "Consumers’ willingness to pay for alternative fuel vehicles: A comparative discrete choice analysis between the US and Japan," Transportation Research Part A: Policy and Practice, Elsevier, vol. 70(C), pages 194-209.
  • Handle: RePEc:eee:transa:v:70:y:2014:i:c:p:194-209
    DOI: 10.1016/j.tra.2014.10.019
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    References listed on IDEAS

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    Cited by:

    1. Fetene, Gebeyehu M. & Hirte, Georg & Kaplan, Sigal & Prato, Carlo G. & Tscharaktschiew, Stefan, 2016. "The economics of workplace charging," Transportation Research Part B: Methodological, Elsevier, vol. 88(C), pages 93-118.
    2. Milan Scasny & Milan Scasny & Iva Zverinova & Mikolaj Czajkowski, 2015. "Individual preference for the alternative fuel vehicles and their attributes in Poland," EcoMod2015 8575, EcoMod.
    3. Axsen, Jonn & Bailey, Joseph & Castro, Marisol Andrea, 2015. "Preference and lifestyle heterogeneity among potential plug-in electric vehicle buyers," Energy Economics, Elsevier, vol. 50(C), pages 190-201.
    4. Pacharaporn Arkornsakul & Woraphon Yamaka & Sombat Singkharat, 2015. "Consumer?s Willingness to Pay for Gasohol E100 in Chiang Mai Province and Nakhon Ratchasima Province," Proceedings of International Academic Conferences 2704676, International Institute of Social and Economic Sciences.
    5. Giansoldati, Marco & Danielis, Romeo & Rotaris, Lucia & Scorrano, Mariangela, 2018. "The role of driving range in consumers’ purchasing decision for electric cars in Italy," Working Papers 18_4, SIET Società Italiana di Economia dei Trasporti e della Logistica.
    6. Newbery, David & Strbac, Goran, 2016. "What is needed for battery electric vehicles to become socially cost competitive?," Economics of Transportation, Elsevier, vol. 5(C), pages 1-11.
    7. Brand, Christian & Cluzel, Celine & Anable, Jillian, 2017. "Modeling the uptake of plug-in vehicles in a heterogeneous car market using a consumer segmentation approach," Transportation Research Part A: Policy and Practice, Elsevier, vol. 97(C), pages 121-136.
    8. Hackbarth, André & Madlener, Reinhard, 2016. "Willingness-to-pay for alternative fuel vehicle characteristics: A stated choice study for Germany," Transportation Research Part A: Policy and Practice, Elsevier, vol. 85(C), pages 89-111.
    9. repec:eee:transa:v:100:y:2017:i:c:p:182-201 is not listed on IDEAS
    10. Bigerna, S. & Bollino, C.A. & Micheli, S. & Polinori, P., 2017. "Revealed and stated preferences for CO2 emissions reduction: The missing link," Renewable and Sustainable Energy Reviews, Elsevier, vol. 68(P2), pages 1213-1221.
    11. Kemal Çelik & Erkan Oktay & Muhsin Doğan Ebül & Ömer Özhancı, 2015. "Factors influencing consumers’ light commercial vehicle purchase intention in a developing country," Management & Marketing, De Gruyter Open, vol. 10(2), pages 148-162, September.
    12. Wolinetz, Michael & Axsen, Jonn, 2017. "How policy can build the plug-in electric vehicle market: Insights from the REspondent-based Preference And Constraints (REPAC) model," Technological Forecasting and Social Change, Elsevier, vol. 117(C), pages 238-250.
    13. Irani, Alexandra & Chalak, Ali, 2015. "Harnessing motorists’ potential demand for hybrid-electric vehicles in Lebanon: Policy options, CO2 emissions reduction and welfare gains," Transport Policy, Elsevier, vol. 42(C), pages 144-155.

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